No time to take exit ramp for Taxachusetts - Boston Herald

House Speaker Ronald Mariano pledged last weekend not to raise taxes on Massachusetts residents — for now.

But the momentum continues to build for boosting taxes on the state’s highest earners.

Right now, “We have no intention of raising taxes,” Mariano, a Quincy Democrat, said Sunday on WCVB-TV’s “On the Record.”

That’s probably because tax revenues to date have exceeded expectations; January posted a $500 million beat beyond the Baker administration’s forecast.

Mariano’s no tax-hike pledge reflects the commitment the governor made last month in his updated $45.6 billion fiscal 2022 budget, which didn’t include any tax increases.

State Rep. James O’Day posited the seemingly contradictory theory that since many sectors of the state’s economy are struggling, more taxes are in order.

But the Worcester Democrat isn’t proposing any broad-based burden on Massachusetts residents. He’s referring to the so-called millionaires tax that will likely be on the state ballot in 2022.

“Look at the stock market, look at Wall Street — they’re killing it while middle America, main street America is definitely hurting,” said O’Day in the Herald this week. Of course, billions of average Americans’ public and private pension funds have also benefited from the market’s rise, but that’s not germane to O’Day’s point.

That populist-sounding “fairshare” constitutionally required amendment would place a question on the 2022 ballot that seeks to impose a 4% surtax on income above $1 million. Currently, every earner is taxed at the same flat rate, 5%.

Supporting lawmakers estimate it could generate an additional $2 billion in annual revenues.

The measure passed by wide margins in a constitutional convention in the last legislative session and will need to do so again in the current session before going before voters in November 2022.

But some Robin-Hood lawmakers might not wait until that constitutional amendment quest runs its course.

State Rep. Mike Connolly could refile a measure that failed in the last budget cycle to raise the tax rate on unearned income such as dividends and long-term capital gains from 5% to 9%.

The Massachusetts Budget and Policy Center projected that would generate an extra $465 million a year, but opponents warn higher taxes could stifle the economy and drive high earners out of the state.

That’s the same argument leveled against the millionaires’ tax, but those 1-percenters don’t engender much sympathy in the Democrat-dominated Legislature.

Those 1-percenters also constitute the entrepreneurial class that creates businesses and provides thousands of jobs for Massachusetts residents.

They may be perceived as cash cows to be exploited by revenue-enhancing Democrats, but they could just move to greener pastures if pushed too far.

That’s happening in other high-tax, overregulated states.

According to Bankrate, Oracle and Hewlett Packard Enterprises have announced plans to move their headquarters from California to more business- and tax-friendly Texas.

And it’s no coincidence that Texas is one of the top five states in population gained from mid-2019 to mid-2020. The others are Florida, North Carolina, Georgia and Arizona.

New Hampshire and Maine are the only New England states that experienced a net population gain in that timeframe.

We’re certain our governor would rather see the state work its way out of any economic hole than further tax the engines of that rebound.

And the welcome mat has already been extended in New Hampshire and all those Sun Belt states.

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No time to take exit ramp for Taxachusetts - Boston Herald
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